The new product eliminates the middle man profits and interest expenditures and makes the prices cheaper by 45 percent. The technical service group includes development and property consultants, architects and engineers, contractors, sub-contractors and suppliers who during the boom times service the major developers. Some of these developers suffered and went bust due to the liquidity crunch caused by the recent crisis.
One such example of this new product in the Philippines is the recently successful launch of "Penhurst Parkplace" by G&W Development Consultants headed by veteran architect Gilbert C. Yu. The average director cost of the units is P37,000/sqm located in upscale Fort Bonifacio Global City. This cost could go down to P28,000/sqm if located in a secondary urban area.
The new product is not only affordable but is targeted towards home users, including up and coming professionals and new generation families. A direction which runs parallel with the government’s housing program.
The leading marketing firm sees three dramatic changes that will happen in the coming boom. One, the investor buyers will become more intelligent gained through painful experience and look at it as long term investments for rental and others that will require careful evaluation on the location and quality rather than as speculative commodities for quick money.
Two, the user-buyer will learn to group themselves and buy services and participate in the development that brings them large savings rather than buying end product.
And three, the change will dislodge the conventional developers out of its leading position unless they change because of their debt burden that makes their production cost more expensive and eventually leads to higher prices.
Rehaus further cited Singapore as an example. A tiny nation 3,000,000 population which because of its affordable housing prices has maintained an annual demand for housing of 200,000 units a year. This is because the government understands that affordable quality housing for their citizens is reflective of the nation’s progress.
The change will also benefit other industries and the economy in general because unlike the previous property boom which was led by the speculator market that tied down liquidity into idle properties. The new market will free up the liquidity of the middle class professionals through home buying and pump it into the economy.